Sustainability

Sustainability informs how we invest and shapes our corporate culture. Consideration of material governance and sustainability factors in our risk-return assessments of prospective borrowers can enhance our investment decisions. Operating responsibly is intrinsically linked to fostering a committed workforce and engaging meaningfully with the communities in which we operate.

Sustainable Investing

Pemberton’s focus is on delivering long-term value for our investors by lending to established, well-managed European businesses poised for growth. We recognise that incorporating governance and, and sustainability factors into our investment approach can help identify both risks and opportunities. Social and environmental trends are shaping the economies and industries in which our portfolio companies operate, while good governance forms the foundation of all resilient businesses.

Pemberton’s framework for creating sustainable value throughout the investment lifecycle.

Download our TCFD and Sustainability Reports.

Value-add of Sustainable Investing

Investment Due Diligence

Effective risk management is fundamental to private credit. Our investment teams conduct rigorous due diligence, seeking to avoid businesses with governance shortcomings and concerns. At the same time, we assess how prospective mid-market borrowers are positioned to navigate sustainability risks and opportunities, which can range from supply chain risks to environmental policy tailwinds that support growth of a company’s products and services.

Portfolio Monitoring

Post-investment, Pemberton’s teams maintain ongoing engagement with borrowers to proactively identify and manage any potential deterioration in the risk-return profile, including governance and sustainability concerns. We monitor the management and disclosure of sustainability matters through our annual Borrower Questionnaire. While an important instrument in our asset class to incentivise progress on sustainability performance through the loan lifecycle is a ‘margin ratchet’, which reduces the loan interest margin if the borrower delivers against predefined, material sustainability targets.

Beyond Direct Lending

Pemberton’s Sustainable Investing Policy and governance review are embedded in risk management for our private credit strategies. For example, substantially all* potential investments across our platform must undergo a ‘red flag’ controversy screen using a third-party specialist provider. Where sustainability and governance concerns are identified for a prospective borrower, requiring deeper guidance and decision-making, the relevant investment team can escalate the opportunity to the Sustainable Investing Advisory Council to consider on a case-by-case basis.

*where there is coverage by the third-party controversy database

Stewardship to protect and enhance long-term value

We strive to undertake stewardship responsibilities to the extent possible for an investor in our asset class, with a materiality-based approach to engagement efforts to protect and enhance value. As the sole or lead lender in direct lending, Pemberton has a degree of influence to encourage portfolio companies in strengthening their risk mitigation and preparedness for sustainability disclosure and climate regulation in Europe and the UK. We run a successful series of sustainability workshops for our portfolio companies, for instance providing guidance on carbon measurement and reporting, with participation by external expert speakers.

Sustainable Investing: Rating & Case Studies

Operating Responsibly

How we lead by example through our own corporate operations:

Environmental stewardship

Pemberton has offset its Scope 1 and 2 carbon emissions and Scope 3 business travel emissions since 2019.

Our People

We are committed to fostering a supportive and diverse environment for our colleagues, where everyone’s contribution is valued.

Data as of 31 December 2023

Supporting & Developing Talent

We empower employees to reach their full potential. Our initiatives include leadership training for all Directors and above, as well as mentoring and coaching opportunities.

A Performance Culture

Our success is driven by our people. We prioritise talent retention and aligning incentives across our leadership, investment, and client teams. Alignment of interests:

  • Ownership structure that includes the Firm’s leadership team and key partners from investment and client teams
  • Institutional shareholder committed to sustainable investing and a substantial investor across our strategies
  • Incentive structure aligning key personnel to the long-term success of the business

Community Outreach

Initiatives include ‘Investing Potential’ through the Private Credit Social Mobility Project to provide internships and work experience to students from underprivileged background.

Data as of 31 December 2023

Corporate Social Responsibility (CSR)

Pemberton seeks to positively impact the communities in which we operate, encouraging employee participation in meaningful engagement initiatives.